Posts Tagged ‘NAIC’

MARCH 28, 2011 VOLUME 18 NUMBER 11
Are we just too cynical? Is it possible that the flyer we received in the mail last week is genuinely valuable and the company upstanding? Could it be that it is not an annuity sales pitch aimed at seniors?

On one side we see a series of “Consumer Alerts.” They look serious, and they are even numbered. They caution readers to watch out for people holding themselves out as “senior advisor,” “senior consultant,” or similar designations. They even warn the reader that the National Association of Insurance Commissioners is on the watch for those designations, and has adopted a “model regulation” to discourage their use.

By the time you read to “Alert #2,” however, you begin to wonder. It warns you that if you have an annuity that is two years old or older “YOU MUST ATTEND” the seminar advertised on the reverse side of the flyer.

“Alert #3” leaves you even more doubtful. It promises that a series of apparent luminaries will have “RECORDED MESSAGES” at the seminar.

Flip it over, and the flyer invites you to “Be Our Dinner Guest” at one of three high-end local restaurants. Dinner begins at 3:30PM in each case, so you might want to speculate on how that will work. Maybe you won’t have to speculate too much, however; in smaller print you see that dinner will be offered after “our acclaimed workshop.” You will also learn that you have to “qualify to attend,” and that “financial advisors, insurance agents, attorneys and accountants pay $1,000 attendance fee.” Apparently this is a pretty high-powered program!

Who are these people, and what are they up to?

The flyer lists an organization called Secured Financial Solutions, LLC, as sponsor. The principals in Secured Financial Solutions appear to be Anil Vazirani and Richard Radaelli; neither of their names appear anywhere on the flyer we received. Their names do appear in a 2008 article in Life Insurance Selling magazine, which indicates that they generated over $200 million in insurance premiums in the three years before the article — “most of it in fixed indexed annuities.”

Let’s go back to those “consumer alerts.” The first one, remember, identifies the National Association of Insurance Commissioners as being on the lookout for salesmen using designations like “Senior Advisor.” In fact, the NAIC is a very active organization and it does counsel caution in dealing with insurance, annuity and investment advisors. The (then) President-Elect of the NAIC even testified before Congress in 2007 about concerns for designations like “Certified Senior Adviser,” “Certified Retirement Financial Adviser,” “Chartered Senior Financial Planner,” and “Certified Financial Gerontologist.” Those designations, and others like them, falsely imply that their holders have specialized training and expertise. In fact, they tend to be marketing tools rather than meaningful designations, according to Ms. Praeger’s testimony.

A year later, as President of the NAIC, Ms. Praeger had more to say about investment scams targeting seniors. In a June, 2008, press release from the NAIC she gives good advice on how to deal with annuity salesmen. Two of her good ideas: “Beware of ‘free lunch’ investment seminars,” and “Never make a final decision at a seminar.” We think those are good pieces of advice.

In fact, the NAIC has plenty of suggestions for consumers — particularly seniors — to help protect themselves from unscrupulous financial advisers. A few of our favorites:

All right — maybe we’re too cynical. After all, the flyer includes apparent endorsements from a number of luminaries — like Ben Stein (a Fox News commentator who was once discharged by the New York Times over his activities as a pitchman for a questionable “free credit report” product), Charlie Gasparino (another Fox commentator, and author of “The Sellout: How Wall Street Greed and Government Mismanagement Destroyed America’s Global Financial System”) and Harry Dent, Jr. (a financial writer and author who in 2006 predicted the Dow would hit 40,000 by 2010 — it didn’t).

On top of all that, some portion of the enterprise described in the flyer (it is unclear exactly what) is part of “Arizona’s Best in Business — as seen in April 2009, March 2010 & February 2011 of Forbes Magazine.” OK, we’re cynical — we suspect that this refers to an advertisement placed by Secured Financial Solutions. But we’re prepared to be proven wrong and to confess our cynicism about annuity sales tactics and free-dinner workshops.